I want to clarify a couple things.
This isn't ning.com, not at all. This isn't about little social networks, this isn't about bespoke social networks. This is a way to organize large social networks, in such a way as to encourage a sort of forced evolution of ideas and norms.
When I log in to a cellular social media site, I don't just see a tiny network of me and my 300 closest friends. I see, at some level, a huge social media site. I see that there are 100,000,000 photos that have been uploaded. I see Trending Islands. I see some samples from Islands that are closely connected, in some sense or another, to Islands I belong to.
The point is that I only have full access to, I only "belong to", a small set of Islands. I am aware, at some level, of the entire archipelago.
The degree to which I am aware of the rest of the archipelago, the degree to which I can see "nearby" Islands, the populations of my Islands, the ways in which Islands interconnect, and all of that machinery is available to the designers as tuning parameters. The goal is quite specific, it is to maximize evolution of ideas in divergent directions. The goal is maximize the creation of idiosyncratic affinity groups, as divergent and specific as is reasonable.
This is good for art. It's good for ideas. And it's good for monetization too.